The Hackett Group (HCKT, Financial) has announced its first-quarter revenue results, surpassing market forecasts. The company reported earnings of $77.9 million, exceeding the consensus estimate of $77.3 million. The strong performance was aligned with their revenue and adjusted earnings per share projections. This success comes while the company is actively investing in and expanding its GenAI platforms and services.
A key development for HCKT was the release of AI XPLR version 3, a tool designed to identify thousands of industry-specific generative AI solutions and related multi-agent workflows. This innovation is intended to enhance client prioritization and facilitate the custom design of client use cases. The company believes that continued advancements in AI XPLR and their expertise in GenAI implementation will enable the formation of critical channel partner relationships, supporting growth in the rapidly expanding AI sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for The Hackett Group Inc (HCKT, Financial) is $35.67 with a high estimate of $36.00 and a low estimate of $35.00. The average target implies an upside of 37.13% from the current price of $26.01. More detailed estimate data can be found on the The Hackett Group Inc (HCKT) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, The Hackett Group Inc's (HCKT, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Hackett Group Inc (HCKT, Financial) in one year is $26.41, suggesting a upside of 1.54% from the current price of $26.01. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Hackett Group Inc (HCKT) Summary page.
HCKT Key Business Developments
Release Date: February 18, 2025
- Total Revenue: $79.2 million for Q4 2024.
- Adjusted Earnings Per Share (EPS): $0.47, exceeding quarterly guidance.
- Global S&BT Segment Revenue: $43.9 million, with a 4% increase year-over-year.
- Oracle Solutions Segment Revenue: $18.2 million, a 6% decrease year-over-year.
- SAP Solutions Segment Revenue: $17.2 million, a 51% increase year-over-year.
- Adjusted Gross Margin: 47.7% in Q4 2024, up from 43.3% in the prior year.
- Adjusted EBITDA: $19.5 million, or 25.2% of revenues before reimbursements.
- GAAP Net Income: $3.6 million, or $0.12 per diluted share.
- Cash Balance: $16.4 million at the end of Q4 2024.
- Debt Outstanding: Approximately $13 million at the end of Q4 2024.
- Stock Repurchase: 117,000 shares repurchased at an average of $30.95 per share.
- Dividend Increase: 9% increase to $0.48 per share annually.
- Consultant Headcount: 1,284 at the end of Q4 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Hackett Group Inc (HCKT, Financial) reported total revenues of $79.2 million and adjusted earnings per share of $0.47, both exceeding quarterly guidance.
- The SAP solutions segment overperformed for the fourth quarter in a row, driven by significant value-added reseller transactions.
- The GenAI segment showed strong performance, with increased revenue growth from GenAI engagements, which have higher margins than traditional consulting.
- The acquisition of LeewayHertz resulted in accretive revenue growth and is expected to have a consequential impact on 2025 results.
- The company announced a 9% increase in its annual dividend, reflecting confidence in future cash flows and financial health.
Negative Points
- The Oracle solutions segment experienced a 6% revenue decrease due to the wind-down of a large post-go-live engagement.
- Weakness in the e-procurement and OneStream implementation offerings partially offset the revenue growth in the global S&BT segment.
- The overperformance in the SAP segment in Q4 is expected to temper the first-quarter outlook.
- GAAP net income for the fourth quarter of 2024 was significantly lower at $3.6 million compared to $7.9 million in the prior year.
- The company faces challenges with the integration of GenAI capabilities, which could disrupt traditional enterprise application companies.
